1
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UK EYES A
Treasury Chambers Parliament Street London SW1P 3AG
Telephone 01-930-1234 @
233-5354
A WARD ESQ
DS 6
MINISTRY OF DEFENCE
MAIN BUILDING
WHITEHALL
LONDON SW 1
23 October 1975
Dear Andrew,
327)
323)
HONG KONG
As promised, I am writing to let you have our suggested amendments to the redraft of the opening address circulated with 323 your minute of 21 October. These amendments are designed to
reinforce the Governor's suggested alteration of the balance of argument to lay greater emphasis on Hong Kong's ability to pay and less on the UK's financial predicament.
First we suggest that everything after the third sentence of paragraph 3 should be deleted and replaced by the following:
"Hong Kong is unique among our remaining dependent territories
in that it is a fully developed community with a healthy economy, which requires no aid assistance from the United Kingdom. Indeed, if Hong Kong were to be asked to bear the full cost of the garrison, it would in our view be well within the capacity of your economy to pay. Hong Kong's economy enjoyed rapid growth throughout the 1960s and, even after allowing for the set back of the last few years, is well placed to resume a rapid rate of growth as soon as the upturn in world trade gets underway. Even if Hong Kong bore the full cost of the garrison this would represent only about 6% of your total public expenditure programmes and a bare 1% of total GDP. In comparison with many other independent states of the same state of economic development, which bear the whole cost of their defence, this would not be a severe burden. The time has surely come for Hong Kong to bear a share of its defence costs more in keeping with its wealth and state of economic maturity. We recognise, as I have said, that special factors apply to Hong Kong's situation, and that the state of relations with China and the maintenance of political and economic confidence within the Colony both necessitate a UK participation to the costs and the composition of the forces required for security. But by far the greatest stake in Hong Kong's continued prosperity and security must lie with the citizens of Hong Kong. HMG believe that Hong Kong should therefore now assume the major responsibility for and contribution to the costs of its
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